The most recent free cash flows of a firm were $15 million. They are expected to grow at a constant rate of 5% forever. The firm has $60 million in debt, $6 million in preferred stock, and $10 million in marketable securities WACC is 10%. The firm has 10 million shares of stock outstanding. What would the market price per share for this firm be? A $23.90 B $27.10 C. $24.90 D.$26.10
The most recent free cash flows of a firm were $15 million. They are expected to grow at a constant rate of 5% forever. The firm has $60 million in debt, $6 million in preferred stock, and $10 million in marketable securities WACC is 10%. The firm has 10 million shares of stock outstanding. What would the market price per share for this firm be? A $23.90 B $27.10 C. $24.90 D.$26.10
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The most recent free cash flows of a firm were $15 million. They are expected to grow at a constant rate of 5% forever. The firm has $60 million in debt, $6 million in preferred stock , and $10 million in marketable securities WACC is 10%. The firm has 10 million shares of stock outstanding. What would the market price per share for this firm be?
A $23.90
B $27.10
C. $24.90
D.$26.10
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